Income Tax (Earnings and Pensions) Act 2003 section 551

"Qualifying disposals" for purposes of section 550

Section 551 defines what counts as a "qualifying disposal" for the purposes of determining whether a trust arrangement meets the definition of an employee benefit trust under section 550.

• A qualifying disposal must consist of either ordinary shares in the company or an outright cash payment, and must satisfy at least one of three conditions.
• Condition 1 is that the property has been applied for the benefit of employees or former employees of the company (or a company it controls), or their spouses, civil partners, widows, widowers, surviving civil partners, dependants, or relatives and the spouses or civil partners of those relatives.
• Condition 2 is that the property has been applied for charitable purposes; Condition 3 is that the property has been transferred to the trustees of another employee benefit trust, a qualifying employee share ownership trust, or an approved profit sharing scheme.
• The term "relative" for these purposes means a parent, child, or remoter relation in the direct line, or a brother, sister, uncle, aunt, nephew, or niece.